WHAT’S ON TAP?

For the week of May 17th (in conjunction with Econoday):

Earnings season officially comes to an end with the report of Walmart’s earnings.  There are a few earnings reports of note, but economic data and any headlines on the continuing credit crisis should dominate the news.  Let’s take a look at what’s on tap:

Monday -Lowe’s (LOW) will give us a glimpse into the housing market with their earnings report before the bell.

Empire State Mfg Survey 8:30 AM ET

The Empire State manufacturing index jumped 9 points in April to 31.86 signaling strong month-to-month growth. April increases were broad-based.  We are likely to see a healthy number for May as the new orders index in April increased to 29.49 from 25.43 in March.  New York manufacturers appear to be more confident about the economy since they are building stocks.  The inventory index rose to 11.4 in April, a record high.  This restocking trend likely will support May numbers.

Empire State Manufacturing Survey Consensus Forecast for May 10: 30.0

Treasury International Capital 9:00 AM ET

Housing Market Index 1:00 PM ET

Tuesday -Home Depot (HD) and Walmart (WMT) report before the bell.  HP (HPQ) reports after the bell.  All three will be market moving.

ICSC-Goldman Store Sales 7:45 AM ET

Housing Starts 8:30 AM ET

Housing starts in March strengthened from snow-bound February—with permits pointing toward even better improvement than starts.  Housing starts in March rebounded 1.6 percent after a snow storm damped 1.1 percent rise in February.  Permits were even more positive, jumping 7.5 percent, following a 2.4 percent advance in February and boosting the March pace to 0.685 million units annualized.  It is a tough call on April starts.  Sales are up and months’ supply has finally come down somewhat.  But homebuilders may be wary of a potentially sharp drop in sales with the expiration at the end of April for special tax credits for homebuyers.

Housing starts Consensus Forecast for April 10: 0.650 million-unit rate

Producer Price Index 8:30 AM ET

The producer price index for March unexpectedly surged as atypical winter freezes jacked up food prices and gasoline made a partial comeback. The overall PPI rebounded 0.7 percent after declining 0.6 percent in February. But at the core level, the PPI inflation rate was steady with a 0.1 percent gain.  We probably will see a reversal of the headline PPI surge when April numbers come out.  Food prices likely will return closer to normal as new crops come in.  Also, oil prices steadied on a seasonally adjusted basis as the month’s unadjusted $3 boost was close to typical for April.

PPI Consensus Forecast for April 10: +0.1 percent

PPI ex food & energy Consensus Forecast for April 10: +0.1 percent

Redbook 8:55 AM ET

Wednesday -Target (TGT) and Deere (DE) report before the bell.

MBA Purchase Applications 7:00 AM ET

Consumer Price Index 8:30 AM ET

The consumer price index for March nudged up to 0.1 percent from no change the prior month.  Core CPI inflation, however, eased to no change from up 0.1 percent in March.  At the headline level, food prices rose moderately while energy costs were flat.  The core was held down in part by declines in apparel and recreation and flat housing costs.  Food prices are likely to soften a bit as fruits and vegetables have started to come from regions outside of Florida which was impacted by a heavy freeze.  Also, seasonally adjusted oil prices leveled off in April and shelter costs are likely to remain sluggish.

CPI Consensus Forecast for April 10: 0.0 percent

CPI ex food & energy Consensus Forecast for April 10: +0.1 percent

EIA Petroleum Status Report 10:30 AM ET

FOMC Minutes 2:00 PM ET

The Minutes of the April 27-28 FOMC meeting are scheduled for release at 2:00 p.m. ET.  Markets may find out if financial turmoil over Greek debt problems affected Fed thinking on when and how fast to unwind its expanded balance sheet.  Also, traders will be watching to see if the Fed upgraded its quarterly forecast for the economy.

Thursday – No significant earnings.  Jobless claims and leading indicators will dominate the news.

Jobless Claims 8:30 AM ET

Initial jobless claims for the May 8 week slipped 4,000 to 444,000 but were offset by a 4,000 upward revision to the prior week. But the four-week average improved, dipping 9,000 to 450,500 for the lowest level since late March and the second healthiest level of the recovery.

Jobless Claims Consensus Forecast for 5/15/10: 440,000

Leading Indicators 10:00 AM ET

The Conference Board’s index of leading indicators surged 1.4 percent in March, following a 0.6 percent increase the month before.  Although some components of the index are still to be reported, April looks softer.  On the plus side thus far are stock market gains, the factory workweek, and the interest rate spread.  On the negative side thus far are vendor performance, consumer expectations, and money supply.

Leading indicators Consensus Forecast for April 10: +0.1 percent

Philadelphia Fed Survey 10:00 AM ET

The general business conditions index of the Philadelphia Fed’s Business Outlook Survey for April rose 1.3 points to 20.2—well above the breakeven point of zero and signaling an increased rate of month-to-month growth. Based on new orders, the general business conditions index for May should remain well in positive territory. The new orders index in April rose more than 4-1/2 points to 13.9.

Philadelphia Fed survey Consensus Forecast for May 10: 21.5

EIA Natural Gas Report 10:30 AM ET

Friday - No market moving news.

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